Our aging society is confronted with a dramatic increase of patients suffering from tauopathies, which include Alzheimer disease and certain frontotemporal dementias. These disorders are characterized by typical neuropathological lesions including hyperphosphorylation and subsequent aggregation of TAU protein and neuronal cell death. Currently, no mechanism-based cures are available. We generated fluorescently labeled TAU transgenic zebrafish, which rapidly recapitulated key pathological features of tauopathies, including phosphorylation and conformational changes of human TAU protein, tangle formation, neuronal and behavioral disturbances, and cell death. Due to their optical transparency and small size, zebrafish larvae are well suited for both in vivo imaging and drug development. TAU-induced neuronal cell death was imaged by time-lapse microscopy in vivo. Furthermore, we used this zebrafish model to identify compounds targeting the TAU kinase glycogen synthase kinase 3b (GSK3b). We identified a newly developed highly active GSK3b inhibitor, AR-534, by rational drug design. AR-534 reduced TAU phosphorylation in TAU transgenic zebrafish. This transgenic zebrafish model may become a valuable tool for further studies of the neuropathology of dementia.